The development will create 300 jobs and should be completed by September 2003.

Deputy Prime Minister John Prescott, who is MP for the city, unveiled the project on Friday.

It has taken two years to plan the mixed retail and leisure development in Holderness Road.

'Most challenging'

Measuring 190,000 square feet, the facility has been designed to be within walking distance of most city residents.

Working with Hull City Council, developers have agreed to re-build a school and a community centre, and assist in the re-location of a number of local businesses.

Mark Dransfield, of Dransfield Properties, which has developed the project with Dixon Motors, said a major aim was to enhance community and educational facilities.

He said: "This has been one of our most challenging schemes to date.

"We have worked closely with the local authority, particularly the education department and all the businesses who are affected by the development."

Negotiations are continuing with other national retailers about another 40,000 square feet of retail space at the centre.

Before building the centre, developers have to build a new school for the pupils of Craven Primary.